Following finance minister Tengku Zafrul Aziz’s statement yesterday that the government faced a RM17 billion shortfall to repay 1MDB’s total outstanding debts, Najib claimed that the sovereign wealth fund would have a profit of RM9.7 billion if it sells its land in the Bandar Malaysia project valued at RM12 billion and enforces an Abu Dhabi guarantee to bear the cost of a US$3.5 billion (RM14.7 billion) bond.

However, Pua slammed Najib’s claim, calling the former finance minister “financially illiterate” after pointing out that it was not possible to count the RM9.7 billion as a profit, as bonds were structured differently from bank loans.

“Firstly, a first-year accountancy student will be able to educate Najib that he has completely confused a company’s ‘balance sheet’ with its ‘profit and loss’ statement.

“A ‘balance sheet’ typically records a company’s assets and debts, while the ‘profit and loss’ statement talks about 1MDB’s accumulated revenue (very little) and costs (including massive interest expenses) over the past 13 years,” the DAP national publicity secretary said.

In his reply today, Najib said if Pua did not like the word “profit”, then the word “surplus” of RM9.7 billion should be used as the Damansara MP had noted that it only affected 1MDB’s balance sheet.

“Any first-year accountancy student will tell you that this RM9.7 billion would have to reflect in both (balance sheet and profit and loss statements).

“In any case, thank you for confirming that 1MDB’s assets are in surplus of RM9.7 billion over its liabilities – meaning that 1MDB does not need to rely on public funds to clear its existing debts as of today,” Najib said in a statement.

With regard to Malaysia signing back-to-back guarantees with Abu Dhabi, Najib said it was on the condition that 1MDB continue to work with Abu Dhabi to pay the country back as much as US$7 billion by December 2020.

He added that it was “beyond doubt” that Abu Dhabi’s International Petroleum Investment Co (IPIC) had guaranteed US$3.5 billion (RM14.7 billion) of 1MDB’s debts and that its high-level officials were complicit and took 1MDB’s money.

“And the reason why it is in the UK courts today is due to the Pakatan Harapan (PH) government cancelling the settlement agreement as soon as it took power after the 14th general election (GE14).

“As a result, Abu Dhabi has paid us nothing to date despite them guaranteeing the bonds,” he said.

Najib also asked Pua and other PH leaders why they had not questioned the slow progress on the IPIC settlement and the UK court proceedings.

“If the Abu Dhabi settlement agreement had been concluded, Malaysia would have already recovered the bulk of missing funds without the country going after Goldman Sachs, KPMG and Deloitte Malaysia.

“After we had recovered the bulk of the funds, which was our main priority then, the door would still be open to going after (other) parties, including Jho Low,” he said, referring to fugitive Low Taek Jho, who is considered the mastermind behind the 1MDB scandal.